New CMS Proposed Rule Means Billions in Steep Rate Cuts to Home Health Care
- Care in the home is the safer and preferred choice for our seniors and persons with disabilities. Polling shows overwhelming preference for care in the home: 94% of Medicare beneficiaries say they would prefer to receive post-hospital care at home.
- Reducing payments to home health threatens access to vital care in the home. Previous payment cuts reduced care access. As a result, costs of care will go up, with increased hospital readmission rates, unnecessary hospitalizations, and increased use of short-term skilled nursing stays.
- Cuts will negatively impact the growing and high demand for care in the home. The ability for home health agencies to admit patients for services has declined significantly since March 2020. Home health is the preferred post-acute care option for patients, with a 42% increase in average number of referrals per patient sent to home health (vs 32% per referral to skilled nursing facilities). Strong demand for home health has resulted in a 33% increase in referrals sent to home health. However, due to labor cost pressures and staffing challenges, home health admission rates have declined by 15% over the same period. This troubling trend will only worsen with the onset of destabilizing payment cuts to the home health care infrastructure.
- Home health care providers and caregivers have been hit hard by the impact of the pandemic and additional payment cuts will exacerbate the workforce and inflation crisis. Home health agencies are burdened by high inflation rates of over 8%, increased fuel costs which uniquely impact home health care caregivers who drive (or use public transportation) to visit every patient. Workforce costs and wage pressures are also on the rise, with wage and benefit costs increasing at steady rates (since the start of the pandemic)
Legislation: Preserving Access to Home Health Act
The Preserving Access to Home Health Act of 2022 will make the following policy changes:
- Prevent CMS from implementing any permanent or temporary adjustment to home health prospective payment rates prior to 2026.This would delay cuts currently proposed by CMS for 2023 and beyond, allowing more time for CMS to refine its proposed approach to determining budget neutrality in home health.
- Ensure that any adjustments CMS determines to be necessary to offset increases or decreases in estimated aggregate expenditures are made by 2032, such that no cuts would be delayed beyond the end of the budget window.
- The legislation is intended to be self-implementing. It would become effective as of the date of enactment and includes instructions allowing for implementation by program instruction or other means.
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